FIGURE 8-1 
Which operating system is shown in Figure 8-1 above?
Definitions:
Financial Leverage
The use of borrowed money to increase the potential return of an investment, which also increases the risk of loss.
Operating Leverage
A financial ratio that measures the proportion of fixed costs in a company's cost structure, indicating how a change in sales volume will impact operating income.
Economic Value Added
A measure of a company's financial performance based on the residual wealth calculated by subtracting a firm's cost of capital from its operating profit.
Compensation
Payment or benefits provided in exchange for services rendered or as reimbursement for expenses, often related to employment or services provided.
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